Transferable DFIA exemption turns on express input conditions, not implied matching of quality or specifications.

A transferable DFIA under the Customs notification and Foreign Trade Policy is governed by the express conditions applicable to the relevant category of inputs. For inputs covered by paragraph 4.12, the first proviso to condition (iii) requires correspondence only in name, description or quantity, as applicable; it does not add a further requirement that imported materials match exported materials in quality, technical characteristics or specifications. Those additional words appear only in the second proviso for sensitive inputs. The scheme therefore does not justify reading omitted words into the exemption provisions, and no direction for denial of exemption or action against officials was warranted on that basis.

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Issues: Whether the first proviso to condition (iii) of Notification No. 19/2015-Customs and the corresponding provisions of the Foreign Trade Policy, 2015-20 require the imported materials under a transferable DFIA to match the exported materials not only by description or quantity but also by quality, technical characteristics and specifications, and whether any direction could be issued to deny exemption or to initiate action against officials on that basis.

Analysis: The relevant scheme distinguishes between ordinary inputs covered by paragraph 4.12 of the Foreign Trade Policy, 2015-20 and sensitive inputs covered by paragraph 4.30. The text of the first proviso to condition (iii) requires only that, for inputs referred to in paragraphs 4.12(i) and 4.12(ii), the material permitted to be imported must correspond to the specific name or description or quantity, as the case may be, of the material used in the export product. The words relating to quality, technical characteristics and specifications are expressly used only in the second proviso dealing with sensitive inputs and are absent from the first proviso and paragraph 4.12. The scheme therefore does not permit addition of omitted words or imposition of an actual-user style restriction beyond the plain wording of the notification and policy. The register in Appendix 4H and paragraph 4.57 of the Handbook of Procedure are consistent with accounting for imported or domestically procured raw materials and do not create an additional requirement of matching quality or specifications for all DFIA cases. In view of the binding precedents followed by the authorities, no fault could be found with the officials for applying the scheme according to its express terms.

Conclusion: The broader reading urged for the first proviso was rejected, and no direction for denial of exemption or for action against the officials was warranted.

Final Conclusion: The challenge to the DFIA exemption framework failed, and the Court declined to interfere with the administration of the Customs notification and Foreign Trade Policy as interpreted according to their plain language.

Ratio Decidendi: Words deliberately omitted from one part of a fiscal exemption scheme cannot be read into it, and a transferable DFIA must be governed by the express statutory and policy conditions applicable to the particular category of inputs.

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